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Bernardo v. J.D. Nicholas & Associates, Inc.

United States District Court, N.D. Illinois, Eastern Division

September 30, 2014

EUGENE BERNARDO, Plaintiffs,
v.
J.D. NICHOLAS & ASSOCIATES, INC. et al., Defendants.

MEMORANDUM OPINION AND ORDER

VIRGINIA M. KENDALL, District Judge.

Plaintiff Eugene Bernardo filed a complaint against Defendant J.D. Nicholas & Associates alleging violations of federal securities laws and fraud in connection with the marketing and sale of securities. J.D. Nicholas moves to compel arbitration in accordance with an arbitration clause in the Customer Agreement between J.D. Nicholas and Bernardo. Rather than respond to the Motion to Compel Arbitration, Bernardo sought leave of the Court to depose two witnesses who he claims would testify to the fact that he was not competent to enter into the Customer Agreement containing the arbitration clause.

For the reasons set forth below, the Court grants J.D. Nicholas's motion to compel arbitration and denies Bernardo's motion for leave to take depositions.

FACTS

In May 2012, Gregory Dean, a J.D. Nicholas employee, placed a sales call to Bernardo in an effort to persuade him to open an investment account with J.D. Nicholas. After the phone call, Dean sent Bernardo a Customer Agreement and Account Application. (Dkt. No. 1 ΒΆ 15). Only the Account Application had a signature line. The Account Application, however, referenced the Customer Agreement which contained an arbitration clause. Directly above the signature line, the Account Application contained the following statements:

By signing below, I acknowledge that I have received, read, understand and agree to be bound by the terms and conditions as set forth in the Customer Agreement ("Customer Agreement") as currently in effect and as amended from time to time.
BY MY SIGNATURE ON THE ACCOUNT APPLICATION, I ACKNOWLEDGE THAT I HAVE RECEIVED, READ, UNDERSTAND AND AGREE TO THE TERMS SET FORTH IN THE FOREGOING AGREEMENT, AND THAT THIS AGREEMENT CONTAINS A PREDISPUTE ARBITRATION CLAUSE AT SECTION 28 OF PAGE 3.

(Dkt. No. 1-2).

The arbitration clause in the referenced Customer Agreement provides that:

A. The following general provisions apply to all arbitrations pursuant to this section:
II. The parties are waiving their right to seek remedies in court, including the right to a jury trial.
B. Any controversy or claim arising out of or relating to this agreement shall be settled by FINRA arbitration procedures then in effect...
C. This agreement to arbitrate constitutes a waiver of the right to seek a judicial forum unless such a waiver would be void ...

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